Eight Members of the European Parliament (MEPs) from across the political spectrum have joined forces to ask the European Central Bank to properly research helicopter money. By doing so, MEPs are showing that cross-party support exists in the European Parliament for the European Central Bank (ECB) to make direct payments to eurozone residents.

In an official written question to the ECB, eight MEPs from across the political divide have united to demand more research into helicopter money.

The MEPs joined forces to voice their surprise that the ECB had not already looked into making direct cash transfers to eurozone residents to help them during the pandemic, which would not have to be repaid. The action was led by Socialist and Democrat MEP Domènec Ruiz Devesa and also included former Belgian Prime Minister Guy Verhofstadt.

The ECB has so far refused to even research helicopter money, even though ECB President Christine Lagarde pledged to leave “no stone unturned” in the ECB’s upcoming strategic review into its monetary policies and banks such as the Bank of England have announced that they are looking into the idea. This could be a huge wasted opportunity for the ECB, as new research suggests the policy would be extremely effective in keeping the economy going during the coronavirus crisis.

If the ECB made helicopter money payments to every eurozone resident, the bank could directly help people who have seen their incomes shrink because of Covid-19. By dispersing money to people directly rather than through the banking sector, the ECB would also be more effectively supporting the economy than through quantitative easing, which primarily supports private banks and large businesses.

Despite carrying out no research into the potential of helicopter money, the ECB has in the past been careful not to rule out the idea. In April this year, ECB President Christine Lagarde herself said more research was needed, and her predecessor Mario Draghi described helicopter money as an “interesting concept”.

The eight MEPs supporting the question are Domènec Ruiz Devesa (Socialists and Democrats), Guy Verhofstadt (Renew Europe), Pedro Marques (Socialists and Democrats), Phillipe Lamberts (Greens), Jonás Fernández (Socialists and Democrats), Sandro Gozi (Renew Europe), José Gusmão (European United Left – Nordic Green Left) and Salvatore De Meo (European People’s Party).

The ECB is now obliged to answer the MEPs within the next six weeks.

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